Just Eat Business and Revenue Model
Founded in 2001 in Denmark by Jesper Buch, Christian Frismodt, Per Meldgaard, David Buttress, and Henrik Østergaard, Just Eat is an online takeaway and delivery service. Their mission is to make takeaway an easy experience and help consumers choose between a wide range of dishes without any hassle.
In this article, we will explore how Just Eat established itself as one of the leaders in the food delivery industry.
Background Story of Just Eat
Right from the start, one of the key things that set apart Just Eat from other food delivery apps, mainly UK food delivery apps, was their efficient use of technology. They were quickly able to shift their headquarters to London, UK, and expand their business to the Netherlands and Ireland by 2008.
Just Eat is an all-in-one platform that helps people find local takeaway restaurants, place their orders, and either get it picked up or delivered to their homes.
Most of their revenue comes through commissions charged at 10-15% per order and for a long time it didn’t have its own delivery service. Now, Just Eat does have its own delivery service but it doesn’t handle most of its orders. This aggregator model of business greatly limits their dependency on delivery agents and has helped them cut costs and helped them outperform many similar businesses.
Their focus on technology, an efficient business model, helped them build a profitable business, meaningful partnerships, and scale Just Eat to new heights. It didn’t take long for them to become one of the best food delivery apps and the most popular food delivery app in the UK.
Overview of Just Eat UK
Just Eat was listed on the London Stock Exchange in 2014, and acquired by Takeaway.com in 2020. Its annual revenue as Just Eat Takeaway was €2,042 million in 2020.
Just Eat Growth — One of the Best UK Food Delivery Apps
Soon after Just Eat launched in 2001, the founders realized that while they had a good product, the demand for takeaways wasn’t very high in Denmark. Hence, in 2005, Bo Bendtsen, one of the co-founders bought out all the founders and initial investors, except Jesper Buch. After the buyout, Bo Bendtsen & Jesper Buch moved the headquarters to the UK, and David Buttress was hired as the CEO & Co-founder of Just Eat UK.
This move marked the beginning of Just Eat’s international expansion and it was launched in the Netherlands (2007), Ireland (2008), and India (2011) as a joint partnership.
Just Eat received its first Series A funding of £10.5 ($17.4) million in 2009, invested by Index Ventures and Venrex Capital. This helped them expand to various countries.
After raising £30 ($48) million from Series B investment and £40 ($64) million from Series C funding round, Just Eat the UK made several acquisitions that led to an exponential increase in their growth.
Key partnerships:
● Eat.ch in Switzerland
● ClickEat in Italy
● RestauranteWeb in Brazil
● Alloresto in France
● HungryZone in India
Key acquisitions:
● Urbanbite in UK
● YummyWeb in Canada
● SinDelantal in Spain
● 80% stake in Alloresto
● 26% stake in joint venture — IF-JE, formed by merging RestauranteWeb (Just Eat’s venture in Brazil) with its competitor iFood.
● Menulog in Australia for $855 million dollars (Australian)
● Orderit.ca in Canada
Just Eat was listed on the London Stock Exchange in 2014, and acquired by Takeaway.com in 2020. Currently, it is listed as Just Eat Takeaway.com on the London Stock Exchange.
Key Stakeholders of Just Eat
Just Eat has two major customer segments: Consumers (who order takeaways) and Restaurants (who offer takeaways).
Consumers:
Their key value proposition for the consumers is the convenience of ordering food and the accessibility of various options. In accordance with this, Just Eat has 60 million active users making it the world’s leading online food order and takeaway ordering service. The main channel through which Just Eat reaches its consumers is through its website.
Restaurants:
The key value proposition for the restaurants is their increased reach, accessibility, and risk reduction. They reach out to restaurants through their sales team.
How does Just Eat make money?
More than 90% of Just Eat’s revenue is driven by commissions (transaction fees).
Just Eat gets its revenue from three main streams: Joining fees, transaction fees, and advertising fees.
● Joining fees
Joining fees include the initial fees that restaurants pay to join their service.
● Transaction fees
Transaction fees include the commission Just Eat charges for each order placed through their website. As of 2017, Just Eat charged 13-14% as commission per order.
● Advertising fees
Advertising fees include the fees that restaurants pay to appear higher on the search results.
● Service charge
Service charge includes a small fee that customers have to pay as service fees.
Advertising & promotions
Just Eat uses both traditional and online channels to promote itself. They carry out their marketing activities through social media channels, sponsorships, radio advertising, and television.
How much does Just Eat pay to its delivery partners?
Just Eat used to pay their delivery partners for each job they complete. However, they have offered a new payment model since Dec 2020, wherein they'll be paying their riders on a full-time, part-time or zero-hours contract basis.
Along with this hourly wage structure, Just Eat also upholds the minimum wage policy and gives certain benefits like sick pay, pension contribution, maternity/paternity leaves, etc.
Other costs to the company include marketing expenses, operations, customer support, sales, among others.
Just Eat Performance During Covid & its future:
There is a lot to learn from Just Eat’s performance during Covid. Firstly, the Covid-induced lockdown boosted online orders and hence, boosted orders via food delivery apps. Secondly, the nature of orders changed. For eg: On average, there were more orders for breakfast and lunch and dinners were being ordered early.
Using data and the power of digital communication, Just Eat performed exceptionally well during this period.
2020 was also the year when Just Eat was merged with Takeaway.com. This merger has already established Just Eat’s presence in 23 counties and will be a driving force in its growth and success.
Starting as a small takeaway service in Denmark to becoming one of the largest food delivery and takeaway services in the world, Just Eat has had massive growth since its inception.
Their focus on technology, limited overhead costs, and large-scale mergers and acquisitions helped dominate the food delivery space.
While 2020 proved to be a setback for many businesses, it was a defining point for Just Eat.
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